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Indonesia lowers rate for first time in 11 months

by ChemOrbis Editorial Team -
  • 14/01/2016 (11:36)
Indonesia’s central bank cut its main interest rates on January 14 for the first time in eleven months in an effort to boost the slowing economy, according or media reports. The bank lowered its reference rate by 25 basis points to 7.25%, in line with economists’ expectations while also cutting the overnight deposit rate facility and lending facility rate by 25 basis points to 5.25% and 7.75%, respectively.

The bank reportedly stated in a statement that further policy easing will be considered after a thorough assessment of the domestic and global economic situation.

The bank had been reluctant to cut rates ahead of the US Federal Reserve’s rate increases in December out of concerns for the stability of the rupiah, which was the second worst performing currency among emerging Asian economies last year.

Meanwhile, ongoing weakness in the Chinese economy and the recent turbulence in the Chinese stock market put additional downward pressure on Indonesia’s economy, which is expected to grow between 4.7% and 5.1% in 2015, posting the slowest growth since 2009.
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